# AT&T **AT&T** is the company American antitrust keeps returning to. It was the regulated monopoly the government broke up in 1984, the reassembled giant that bought its way back to scale in 2005, the vertically integrated media conglomerate the Trump Justice Department tried and failed to stop in 2018, and the owner that gave up on the whole idea four years later. Each episode is a different answer to the same question — what the law can do about a firm that owns the pipe — and the answers have gone from "break it up" to "let it merge" to "let it merge and watch it fail." ## Bell to breakup (1885–1984) Incorporated in 1885 as the long-distance arm of the Bell system, AT&T became the parent of the whole system by 1899 and, after the 1913 Kingsbury Commitment (interconnection and no more acquisitions of independents in exchange for being left alone), a government-tolerated monopoly for seventy years. The 1974 DOJ suit ended in the consent decree of January 8, 1982 and the divestiture of the seven regional Bell operating companies on January 1, 1984 — the largest structural remedy in antitrust history and the last one on that scale. See [[AT&T Breakup]] for the decree and for the fact that [[William Baxter]] announced it the same day he dropped the IBM case. ## Recombination (1984–2015) The remedy did not hold. The Baby Bells merged with one another through the 1990s, and in 2005 one of them, SBC, bought its former parent and took the AT&T name. By 2006 the seven had largely become two: AT&T Inc. and [[Verizon]]. Structural relief without structural durability is the vault's standing lesson from both this and the [[Standard Oil Breakup]]. AT&T then bought DirecTV for $48.5B in 2015, the first step toward owning content as well as distribution. ## Time Warner: the vertical-merger test case (2016–2019) On October 22, 2016 AT&T agreed to buy [[Time Warner]] — HBO, Warner Bros., Turner and [[CNN]] — for $85.4B. Candidate Trump said he would block it "because it's too much concentration of power in the hands of too few," while separately calling CNN "fake news." On November 20, 2017 the [[Antitrust Division]] sued: the first litigated challenge to a purely vertical merger in four decades, on the theory that AT&T could use Turner's "must-have" programming as bargaining leverage to raise rivals' costs. Judge Richard Leon rejected the case on **June 12, 2018**, finding the government's testimony and modeling insufficient to show likely price increases once the efficiency of eliminating double marginalization (about $352M a year) was netted out; the deal closed two days later and the unit was renamed [[WarnerMedia]]. DOJ appealed on July 12, 2018 and the D.C. Circuit affirmed unanimously on **February 26, 2019**. Whether the suit was ordinary enforcement or retaliation against CNN was litigated in the press and never resolved in court; the vault's view is on [[AT&T - Time Warner Acquisition]]. ## Giving up (2021–2022) The vertical thesis did not survive contact with streaming. On May 17, 2021 AT&T and Discovery announced a $43B spin-and-merge: AT&T shareholders would own 71% of the combined company, AT&T would take cash and debt relief, and David Zaslav would run it. The deal closed on April 8, 2022 as [[Warner Bros. Discovery]]. AT&T had owned CNN for three years and ten months, sold DirecTV's control to TPG in the same period, and returned to being a telephone and wireless company carrying the debt from both adventures. See [[WarnerMedia - Discovery Merger]] and the [[CNN and Warner Bros. Discovery Timeline]]. ## The other file: surveillance AT&T also appears here for what runs through its network. The [[Snowden Revelations]] documents describe the company as the NSA's most cooperative telecom partner — the "Fairview" program — and the 2006 Mark Klein disclosure of the San Francisco splitter room predates them. See [[NSA and the Telecommunications Industry]]. The same ownership of the pipe that made the Time Warner merger attractive is what makes the company indispensable to state surveillance, which is why it sits in both the [[Corporate Power]] and [[Net Neutrality]] pages. ## See Also - [[AT&T Breakup]] · [[Standard Oil Breakup]] · [[US Antitrust and Monopoly Timeline]] - [[AT&T - Time Warner Acquisition]] · [[WarnerMedia - Discovery Merger]] · [[Time Warner]] · [[WarnerMedia]] · [[Warner Bros. Discovery]] · [[CNN]] - [[Verizon]] · [[Net Neutrality]] · [[Corporate Power]] - [[Snowden Revelations]] · [[NSA and the Telecommunications Industry]]